UAE. The Middle East Hotel Benchmark Survey Report, produced by EY, provides a monthly and year-to-date performance overview of leading hotels in the Middle East. The hotel set includes international branded and operated properties across the five-star and four-star segments.

Commenting on the November 2017 MENA Hotel Benchmark Survey Report, Yousef Wahbah, MENA Real Estate, Hospitality and Construction Sector Leader at EY said: “Overall, the internationally branded four and five star hotels of the Middle East hospitality market witnessed a slight decrease in KPI’s in November 2017 when compared to the same period last year.

In the GCC, all markets except Kuwait and Muscat recorded lower revenue per average room (RevPAR), reflecting the slowdown in performance witnessed across the wider MENA region. However, Cairo’s hospitality market saw the highest increase in occupancy, ADR and RevPAR for November 2017.

Dubai’s hospitality market witnessed a decrease across all KPIs when compared to the same period last year. There was a slight drop in occupancy by 1.3% points in November 2017 when compared to the November 2016. This, coupled with a decrease in average room rate (ADR) by 1.4% from US$290 in November 2016 to US$286 in November 2017 led to a 2.8% drop in RevPAR from US$259 in November 2016 to US$252 in November 2017. While Dubai witnessed an increase in tourist arrivals owing to the cool climate and events such as the Dubai Airshow and Motor Show, the decline in KPI performance may be attributed to the increased supply of hotel rooms in the city.

In Abu Dhabi, the hospitality market witnessed an increase in occupancy by 6.0% points from 82.6% in November 2016 to 88.6% in November 2017. This can be attributed to the opening of the Louvre Abu Dhabi on Saadiyat Island as well as the Formula 1 races that took place in November. The Abu Dhabi hospitality market also saw an increase in RevPAR by 2.9% from US$146 in November 2016 to US$150 in November 2017. However, there was a slight decrease in the ADR by 4.1% from US$176 in November 2016 to US$169 in November 2017.

Muscat’s hospitality market was able to maintain its RevPAR performance at US$150. The hotels however, experienced a slight decrease in ADR from US$178 in November 2016 to US$170 in November 2017, and an increase in occupancy by 12.0% points compared to the same period last year. The increase in occupancy can be ascribed to the several discounts that were offered to residents and tourists by hotels in the country for Oman’s 47th National Day.

In Saudi Arabia, Makkah witnessed the lowest RevPAR and occupancy in the region with a drop of 36.9% in November 2017 when compared to the same period last year; the drop was mainly due to occupancy decreasing from 44.0% in November 2016 to 26.5% in November 2017. However, the ADR saw an increase of 4.8% in November 2017 when compared to November 2016. Jeddah witnessed a slight dip across all KPIs whereas Riyadh and Madinah saw a dip in occupancy when compared to the same time last year.

Doha’s hospitality market witnessed a decrease across all KPIs as well. There was a drop in occupancy by 7.8% points from 72.5% in November 2016 to 64.8% in November 2017. The RevPAR in November 2017 also witnessed a decrease of 22.7% from US$143 to US$111, compared to the same period last year. The hospitality market also witnessed the lowest ADR in the region by 13.5% from US$197 in November 2016 to US$171 in November 2017.

Cairo’s hospitality market emerged as the top MENA performer in November 2017 with the highest increase in occupancy, ADR and RevPAR in the region. The city witnessed an increase in occupancy by 14.6% points, from 63.3% in November 2016 to 77.9% in November 2017. This was coupled by a jump in ADR by 15.6% from US$66 in November 2016 to US$76 in November 2017.

Collectively, this resulted in an overall RevPAR growth of 42.1% from US$42 to US$59 over the same period last year. The significant increase in occupancy levels may be attributed to the government’s efforts in November to revive the tourism industry by increasing incentives for charter airlines carrying a certain number of passengers on international flights.

In the Levant region, Beirut’s hospitality market witnessed a decrease in occupancy by 11.3% points in November 2017 when compared to the same period last year, coupled with a slump in ADR by 1.2%, causing a drop in RevPAR by 18.2% from US$88 in November 2016 to US$72 in November 2017.

The MENA hospitality market is expected to continue the same trend until the end of the year. In the GCC region, the hospitality market can expect some improvements across select cities over the next few months due to better weather conditions as well as the shopping attractions and events such as the Dubai Shopping Festival, before the implementation of VAT.”

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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